[JourneyOfLife]

Looks like there was a bit of a reprieve and a little relief for some homeowners that were impacted by the The Biggert-Waters Flood Insurance Reform Act of 2012.

Apparently the President signed the bill the other day.


It appears the the relief is for primary homes, but rate will still rise.

Flood insurance still on the rise despite new law


I wonder if prospective home buyers can get a multi-year projection of premium rates along with the full actuarial premium that they may have to pay for the home they are thinking about buying?

People whose second home is in a flood zone and those whose properties have flooded repeatedly would continue to see their premiums go up by 25 percent a year until reaching a level consistent with their real risk of flooding.

Obama signs relief from flood insurance hike


Looks like people with vacation homes may have to pay up. I wonder what that will do to the prices of those properties?

[njbchbum]

So does that mean that there is relief for the primary homeowner and no relief for the millions of taxpayers who will still be subsidizing flood insurance premiums and the inefficiencies of FEMA?

[JourneyOfLife]

Read the articles they provide details about the issues.

[clod]

30-40 years ago there was no flood insurance on flood plain houses. Therefore no mortgages. To buh you had to pay cash. Then came Fed. flood insurance in which the owner was subsidized by tax payers for building in a poor location. Mortgages followed, as did lots of large houses. After all, others were taking all the risk. Congress did a rare good job fixing this, now has cold feet and it has been reversed. Too bad. Those who build 50 feet from the shore should pay lots more for insurance than those who are more prudent.

[JourneyOfLife]

Here are a couple of interesting Wiki articles on the topic

They describe the history and why private insurers abandoned the market.

It will be interesting to see if FEMA runs into the same problems as the private insurers as premiums are raised.

Flood insurance - Wikipedia, the free encyclopedia

Apparently a little over half of the people with Flood insurance are in Florida and Texas.

National Flood Insurance Program - Wikipedia, the free encyclopedia

This is a study from the Institute of Policy Integrity

http://policyintegrity.org/documents...gtheMarket.pdf

[graciegirl]

Originally Posted by clod

30-40 years ago there was no flood insurance on flood plain houses. Therefore no mortgages. To buh you had to pay cash. Then came Fed. flood insurance in which the owner was subsidized by tax payers for building in a poor location. Mortgages followed, as did lots of large houses. After all, others were taking all the risk. Congress did a rare good job fixing this, now has cold feet and it has been reversed. Too bad. Those who build 50 feet from the shore should pay lots more for insurance than those who are more prudent.

I agree.

[JourneyOfLife]

It could turn out that the FEMA premiums are going to be so high, some of the private insurers may want back in on the action.

Looks like Florida may pass a bill to entice more private insurers to write flood policies in FL.

Florida lawmakers consider flood insurance changes - wptv.com

[villagerjack]

Originally Posted by clod

30-40 years ago there was no flood insurance on flood plain houses. Therefore no mortgages. To buh you had to pay cash. Then came Fed. flood insurance in which the owner was subsidized by tax payers for building in a poor location. Mortgages followed, as did lots of large houses. After all, others were taking all the risk. Congress did a rare good job fixing this, now has cold feet and it has been reversed. Too bad. Those who build 50 feet from the shore should pay lots more for insurance than those who are more prudent.

Unfortunately, it is not just those who built 50 feet from the shore who are affected. Entire economies have built up in places like Hilton Head SC which has very rare occurrences of hurricanes and those investor homeowners are lumped in with the guy who built 50 feet from The shore. It is much more complicated than your simple example. I hope the government proceeds carefully as these new flood maps are uodated.

[TNLAKEPANDA]

Any break in flood insurance cost will come from the tax payers! The program has not been solvent for years now. Every new large flood event gets more expensive. Cost to make repairs are much higher than anyone would ever pay out of their own pocket. The should be no subsidy for secondary homes (which most beach front homes are).

[JourneyOfLife]

One thing is for sure, the cost of a beach, or near the beach, second home just got more expensive.

It will be interesting to see what happens... either the total cost of ownership went up quite a bit or the property prices will drop to offset the increased insurance cost.

I also wonder if building codes will change in certain areas too.

[villagerjack]

Originally Posted by TNLAKEPANDA

Any break in flood insurance cost will come from the tax payers! The program has not been solvent for years now. Every new large flood event gets more expensive. Cost to make repairs are much higher than anyone would ever pay out of their own pocket. The should be no subsidy for secondary homes (which most beach front homes are).

Zing Government created this problem and withdrawing suddenly now will create an even bigger problem. Many economies dependent on tourism have been built up, homes constructed and businesses started because of availability of Flood Insurance. Many areas not prone to flooding are being penalized because of their location, not their flood history. A second homes and investment properties should be treated the same as primary homes. Risk is exactly the same. This has become a political issue more so than an insurance issue.

[graciegirl]

Originally Posted by villagerjack

Zing Government created this problem and withdrawing suddenly now will create an even bigger problem. Many economies dependent on tourism have been built up, homes constructed and businesses started because of availability of Flood Insurance. Many areas not prone to flooding are being penalized because of their location, not their flood history. A second homes and investment properties should be treated the same as primary homes. Risk is exactly the same. This has become a political issue more so than an insurance issue.

Isn't this the same as sinkhole insurance? Now we can no longer buy it because private insurance providers won't offer it because of fraudulent cases?


I am not trying to argue, just to understand. It seems that rates go up when the risk go up...the government cannot underwrite everything. In Ohio people along the Ohio river would flood, rebuild and flood again.

[villagerjack]

Risks are the same for primary owners and owners of second homes/investment properties however the rules are not the same. That is unfair.

[JourneyOfLife]

I have read about some big increase in premium that seemed extremely high.

I was wondering of those news stories were just sensationalizing the cost increases by cherry picking a few houses that may not be typical.

Anybody have any insight into how premiums have increased in florida around the coastal areas?

[janmcn]

Originally Posted by JourneyOfLife

I have read about some big increase in premium that seemed extremely high.

I was wondering of those news stories were just sensationalizing the cost increases by cherry picking a few houses that may not be typical.

Anybody have any insight into how premiums have increased in florida around the coastal areas?

Seminole couple hit with $44,000 flood insurance premium | Tampa Bay Times